Nam Kim Steel deposits VND 400B into Lotte Eco Smart City Thu Thiem project

Overview

Nam Kim Steel (NKG) has disclosed a VND 400 billion deposit to Phat Dat Real Estate (PDR) as part of a cooperation agreement to participate in the Lotte Eco Smart City Thu Thiem project. The deposit, recorded under ‘other investments’ in NKG’s reviewed semi-annual financial statements, is refundable with 15% annual interest if the investment contract is not finalized by December 30, 2026. This move highlights NKG’s strategic diversification into real estate, while PDR gains a financial partner for its significant stake in the mega-project.

Key Facts

• NKG recorded a VND 400 billion deposit to PDR under a cooperation agreement signed in April 2026, aimed at participating in the Lotte Eco Smart City Thu Thiem project.
• The deposit is refundable with 15% annual interest if the investment contract is not signed by December 30, 2026.
• NKG’s short-term financial investments surged from about VND 835 billion to nearly VND 3,200 billion in the first half of 2026.
• NKG also extended loans totaling about VND 806 billion to third parties, including VND 356 billion to Kien Thong Securities, VND 350 billion to PDR Chairman Nguyen Van Dat, and VND 100 billion to HBM Real Estate Investment and Trading LLC.
• PDR’s reviewed semi-annual financial statements confirm the VND 400 billion as a deposit under the investment cooperation contract with NKG.
• The Lotte Eco Smart City Thu Thiem project has a total estimated investment of about VND 60,000 billion, with PDR participating in over VND 10,000 billion.
• PDR will co-develop residential components in blocks 2-2, 2-4, and 2-6, and lead development of commercial towers in blocks 2-1 and 2-3, plus a four-story podium.

What Happened

Nam Kim Steel (NKG) released its reviewed consolidated semi-annual financial statements for 2026, revealing a significant increase in short-term financial investments from approximately VND 835 billion to nearly VND 3,200 billion. Within this, NKG holds over VND 76 billion in trading securities and about VND 3,100 billion in held-to-maturity short-term investments. Notably, the company has extended loans to third parties totaling around VND 806 billion, including VND 356 billion to Kien Thong Securities, VND 350 billion to Nguyen Van Dat, Chairman of Phat Dat Real Estate (PDR), and VND 100 billion to HBM Real Estate Investment and Trading LLC, all guaranteed by PDR.

In addition to these loans, NKG recorded a VND 400 billion amount under ‘other investments’. According to the notes, this represents an unsecured capital contribution to PDR under a memorandum of understanding signed in April. The agreement stipulates that if NKG and PDR do not sign an investment cooperation contract before December 30, 2026, the amount will be returned to NKG with 15% annual interest. NKG’s management assesses the amount as recoverable. Conversely, PDR’s reviewed interim financial statements state that the VND 400 billion is a deposit under the investment cooperation contract with NKG, aimed at participating in the Lotte Eco Smart City Thu Thiem project.

Market Context

NKG, listed on HOSE, closed at VND 10,750 on September 5, 2026, while PDR closed at VND 12,200 on the same date. The steel sector has faced headwinds, but NKG’s net profit doubled year-on-year in H1 2026 despite a 6% revenue decline. The move into real estate via the Lotte project represents a notable diversification for a steel company, potentially offering higher returns but also exposing NKG to real estate development risks. PDR, a mid-cap real estate developer, is leveraging partnerships to fund its participation in the high-profile Thu Thiem project, which is expected to boost its portfolio and market standing.

Strategic Significance

For NKG, the deposit and related loans to PDR and its chairman signal a strategic pivot toward higher-yielding financial investments and real estate participation, leveraging its strong cash position. The 15% interest rate on the deposit and loans provides a lucrative return if the deal proceeds, but the recoverability depends on PDR’s ability to finalize the project. For PDR, securing NKG as a partner strengthens its financial capacity to co-develop the Lotte Eco Smart City Thu Thiem, a landmark project in Hồ Chí Minh City. The collaboration could enhance PDR’s development pipeline and revenue prospects, while NKG gains exposure to one of Vietnam’s most anticipated urban developments.

What to Watch

• Execution of the investment cooperation contract between NKG and PDR before the December 30, 2026 deadline.
• Progress of the Lotte Eco Smart City Thu Thiem project, including land clearance and construction milestones.
• PDR’s financial health and ability to meet its VND 10,000 billion investment commitment.
• NKG’s quarterly financial reports for any updates on the deposit’s status or additional investments in real estate.
• Regulatory approvals and any changes in the project’s scope or timeline.